Jul 24, 2008

In a follow-up to last week's blog on the tax whores, I was perplexed by the Wall Street Journal interview of companies, in the tax resolution space, that are willing to provide services to people that the customer perceives having no value.

To quote John Harris, the President of JK Harris, the "largest tax resolution firm in the industry," - "You are going to have (customer) complaints in this industry." This statement has a basic flaw in its premise: you will have complaints if you are stating you are going to provide something that you cannot provide.

I want to assure everyone that there is no such thing as a "free lunch." Hence, if you are inquiring to me about a "free lunch," you are not asking the right question. If you are in tax debt trouble, you probably need assistance to know your options. However, the solution will not be easy, nor will it be painless. Any such promises are purely false advertising.

Tax debts can last for 10 years or more. Tax liens can exist for this time period also. If you owe tax debt, the IRS is the creditor- and they are a creditor that does not need a "judgement" to collect on you- they have the power of levy (seizure) and lien filing.

The premise that is most disturbing is the popular solution: the Offer in Compromise. This solution is available to very few (the WSJ article points this out). Furthermore, it is only one of many options you need to consider of which the OIC may not be the best. However, it has seemed to get the most press and appears to have preyed on people who can be easily victimized. As there are no get rich schemes, there is no free lunch in resolving your tax matters.

So, let the buyer beware- such promises will lead you astray. Talk with someone who will provide a solution. And , be prepared to participate in resolving the problem with them (this is called "discovery" in legal proceedings).

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